Debate Continues Over The Future Role Of Government In Housing

In an op-ed written for the Washington Post, former treasury secretary Hank Paulson says government policies promoting homeownership fueled the housing crisis and, once the market has stabilized, should be dramatically reformed. Specifically, he recommends scaling back both Fannie Mae and Freddie Mac and reducing subsidies for homeownership. Limiting the availability of subsidies to smaller mortgages or lower-income buyers would reduce the scope of the government’s role and lead to less risk to taxpayers and the economy. Former Federal Reserve Chairman Paul Volcker also weighed in on the debate in an article from SmartMoney magazine. Volcker says Fannie Mae and Freddie Mac are unnecessary and should be eliminated because of the inherent conflict between their responsibilities to the government and their stockholders. He believes the entire mortgage market has to be reconstructed in the coming years. More here and here.

Filed under: Uncategorized, Fannie Mae, Federal Programs, Foreclosures, Freddie Mac, Housing Market, Prices, Real Estate, Views

Fannie, Freddie, and The Housing Forecast

With 25 percent of mortgages underwater and high levels of delinquencies, James Lockhart, former director of The Office of Federal Housing Enterprise Oversight, says the housing market will need another year or more before it shows signs of recovery.

Filed under: Uncategorized, Delinquencies, Fannie Mae, Foreclosures, Freddie Mac, Housing Market, Real Estate, Second-Lien Modification, Video, Views